There are countless options available when it comes to purchasing and investing in real estate, but one of the biggest decisions you can make is whether to purchase or rent your home. Purchasing a home can seem like an overwhelmingly large undertaking – not only do you have to come up with enough money to afford the down payment, but you also have to be prepared to pay for maintenance, mortgages, property taxes, insurance, and more. If you’re considering purchasing instead of renting in 2022, keep these mortgage-backed securities in mind when choosing your home loans.

Securitization Overview

In simple terms, securitization is the process of pooling together a bunch of loans and then selling them off as securities. This enables lenders to free up capital so they can make more loans. The securities are then bought by investors, who receive periodic payments (known as interest payments) from the borrowers.

Market Outlook
In 2022, the mortgage-backed securities market is expected to remain strong. Interest rates are expected to stay low, and home prices are expected to continue to rise. This will create a favorable environment for borrowers and investors alike. However, there is always the potential for unforeseen events that could impact the market.

Key Risks for Mortgage-Backed Securities
In the next few years, there are a few key risks that could have an impact on mortgage-backed securities. First, interest rates are expected to rise, which could lead to higher mortgage payments and defaults. Second, home prices could fall, leading to more foreclosures and further deterioration of the housing market. Third, the economy could weaken, leading to job losses and more difficulty for borrowers to make their mortgage payments.

The Role of Private MBS Issuers
In recent years, the mortgage-backed securities (MBS) market has been dominated by government-sponsored entities (GSEs) like Fannie Mae and Freddie Mac. However, this is expected to change in 2022 as private MBS issuers are expected to play a larger role in the market. This shift is due to several factors, including the expiration of the GSEs’ government guarantee and an increase in interest rates.


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